Valve handbook: an unique way to organize talent and business

This week I was having dinner with Hans the Zwart who is a former colleague of mine. He is one of the most well-read people I know and when he gives me a reading tip, I will read it. This time he mentioned the Valve ‘Handbook for new employees‘. Valve is a game company (known for Half-Life, Team Fortress 2, and Portal and the digital delivery platform Steam) which is organized in a unique way. The handbook is an internal guide for new employees in order to ‘not freak out’ when starting to work in an organization without any formal structures.

It really is a very interesting read. At Valve there is no hierarchy, no formal job description, no bosses, nothing of the structures you would expect in a company that has some 300 employees.

People decide themselves what project or product they will work on and what kind of contribution they will make. The idea is that they are best capable to decide where they are of the biggest value for the company (and for the customers). Roles are fluid and can change when the requirements of the work change. Projects are voted on by feet (or better wheels). If you find a project interesting you can just roll your desk over (they have wheels) and start participating. Everybody can start up new projects or products, all you need to do is convince other people to join you.

When evaluating people they will use a peer evaluation along four dimensions:

Skill Level/Technical ability

Productivity output

Group contribution

Product contribution

Based on this peer evaluation they will ‘stack rank’ employees and based on that they will decide on their compensation. Not surprisingly ‘Hiring’ is the most important process in this company. Getting the right people in is crucial for such kind of organization. They use the same four dimensions when hiring and they are looking for what they call T-shaped employees.

This means people who are generalist, but they also are an expert in one field. This is the best guarantee that people can collaborate in a team and will have added value to that team.

There is a lot more to read in the 55 pages, so please do. For me books like this are interesting because the ideas are so far out of the box that it stretches your own boundaries. In this case it will even remove boundaries. It will change the way you look at your own organization and that is always a good thing.

By the way. Another tip from Hans, his favorite movie ‘The big Lebowski‘. And if he says you should watch it, you should.